Jerry Colella became the CEO of MKS Instruments, Inc. (NASDAQ:MKSI) in 2014. First, this article will compare CEO compensation with compensation at similar sized companies. After that, we will consider the growth in the business. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. This method should give us information to assess how appropriately the company pays the CEO.
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How Does Jerry Colella’s Compensation Compare With Similar Sized Companies?
According to our data, MKS Instruments, Inc. has a market capitalization of US$4.1b, and pays its CEO total annual compensation worth US$10m. (This is based on the year to December 2018). That’s a notable increase of 22% on last year. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at US$993k. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$5.3m.
It would therefore appear that MKS Instruments, Inc. pays Jerry Colella more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.
The graphic below shows how CEO compensation at MKS Instruments has changed from year to year.
Is MKS Instruments, Inc. Growing?
Over the last three years MKS Instruments, Inc. has grown its earnings per share (EPS) by an average of 46% per year (using a line of best fit). Its revenue is down -2.4% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. While it would be good to see revenue growth, profits matter more in the end. It could be important to check this free visual depiction of what analysts expect for the future.
Has MKS Instruments, Inc. Been A Good Investment?
Boasting a total shareholder return of 93% over three years, MKS Instruments, Inc. has done well by shareholders. This strong performance might mean some shareholders don’t mind if the CEO were to be paid more than is normal for a company of its size.
We examined the amount MKS Instruments, Inc. pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.
However we must not forget that the EPS growth has been very strong over three years. Even better, returns to shareholders have been plentiful, over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. Shareholders may want to check for free if MKS Instruments insiders are buying or selling shares.
Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.
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If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.